Volkswagen chief says diesel engine refits 'manageable'

The steps needed to fix about 8.5 million Volkswagen cars in Europe fitted with illegal emissions-control software are technically and financially manageable, the German automaker's chief executive said on Monday.

Analysts have said the costs of fines, lawsuits and vehicle refits caused by VW's rigging of diesel emissions tests could top €40 billion ($59 billion).

"The efforts (needed) to carry out the refits are technically, mechanically and financially manageable," chief executive Matthias Mueller said in a speech to managers at the company's Wolfsburg base. "This is a good development."

Separately, Audi said late on Monday a "mid-level double-digit million euro" amount will be needed to reprogramme the auxiliary emission control software (AECD) in 3.0-litre diesel engines deemed illicit by U.S. authorities.

The U.S. Environmental Protection Agency said last Friday that emissions issues in larger luxury cars and SUVs extended to an additional 75,000 VW group vehicles, including Audi and Porsche models.

VW's flagship luxury division said it failed to properly disclose the use of three AECDs, adding one which is designed to adjust the working temperature of catalytic converters is viewed as a defeat device by U.S. authorities.

Audi also said the group's decision to take affected vehicles off the market had been extended until further notice, without being more specific.

VW has set aside €6.7 billion ($9.9 billion) to help cover the costs of the diesel recalls and another €2 billion ($2.9 billion) for compensation payments related to its manipulations of carbon dioxide emission levels.

Europe's largest automaker has the approval of Germany's KBA motoring watchdog for fixes for more than 90 per cent of the affected cars, including models with 1.6-litre and 2-litre engines, Mueller said, adding technical solutions for 1.2-litre vehicles will be presented by the end of the month.

The CEO warned clearing up the emissions scandal would still take several months, though VW plans to publish intermediate results of the investigation next month.

"Investigations are running at full speed," the CEO said. "To avoid raising false expectations, we are talking about very complex processes which in part date back a long time."